First-Ever Pentagon Audit Will Cost $367 Million This Year

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Budget hawks have been calling for an audit of the Defense Department for years. They’re finally getting one. Pentagon Comptroller David L. Norquist announced in December that the audit has begun, with results expected this year. "Beginning in 2018, our audits will occur annually, with reports issued Nov. 15," Norquist said.

Norquist updated Congress on Wednesday, telling the House Armed Services Committee that he expects the Pentagon to spend $367 million on the audit this year, which includes $181 million for outside accounting firms. He also expects the agency to spend an additional $551 million fixing problems that are identified along the way.

The task is enormous, given that the Defense Department spent more than $600 billion last year. The Pentagon engages in 15 million to 20 million budget transactions per year, Gordon Adams, a defense spending expert at the Stimson Center, told The Atlantic.

The Pentagon is hiring 1,200 outside auditors to comb through transactions and review assets thought be worth $2.4 trillion — though no one knows for sure, given the lack of a past audit. Norquist said the effort will “likely be one of the largest audits ever undertaken and comprises more than 24 standalone audits and an overarching consolidated audit.”

“The taxpayers deserve the same level of confidence as a shareholder that DoD’s financial statement presents a true and accurate picture of its financial condition and operations,” Norquist said. “Transparency, accountability and business process reform are some of the benefits of a financial statement audit.”

However, critics may end up less than completely satisfied with the results of the review. Adams told The Atlantic that audits don’t really address what matters most: “It doesn’t tell you that we’re not getting the right bang for the buck. It doesn’t tell you anything about whether we’re getting the right forces for the threat. It doesn’t tell you how well the forces perform. It doesn’t tell you where we are wasting capability that we don’t need.”

In the end, Adams warns, the audit runs the risk of allowing lawmakers “to look tough on defense and spend a lot on defense at the same time.”